• Govt. confirms no restrictions on vehicle types following import ban lift
• Vehicle imports align with State targets despite concerns over high prices
• IMF agreement rules out any tax cuts on vehicles for 2025

Financial institutions have opened Letters of Credit (LCs) worth $ 530 million so far this year for the importation of over 70,000 vehicles, according to the Ministry of Trade, Commerce, and Food Security.

Speaking to The Sunday Morning Business, Deputy Minister of Trade, Commerce, and Food Security R.M. Jayawardana stated that following the relaxation of the vehicle import ban in January, the Government had no intention of regulating what was being imported. 

The Deputy Minister added that it was open for the market to import vehicles across the spectrum. 

He further revealed that over $ 530 million worth of LCs had been opened by local financial institutions in order to fund vehicle imports during the past five months.

“To date, over 70,000 vehicles have been imported to the country. However, the vehicles that have been brought down have been subjected to certain controls,” he stated.

Speaking to The Sunday Morning Business, Department of Trade and Investment Policies Director General M.K. Pradeep Kumara stated that vehicle import figures for the first five months of 2025 had been in line with the Government’s targets.

Over the past few months, there was widespread speculation that the high prices of newly imported vehicles, driven by increased taxes, have deterred consumers from making purchases. 

It was further claimed that the anticipated pent-up demand had not materialised, raising concerns that the Government might fall short of its expected tax revenue from vehicle imports.

Speaking on a television programme in March, Senior Economic Adviser to the President Duminda Hulangamuwa revealed that they were anticipating the generation of tax revenue amounting to around Rs. 300-350 billion from vehicle imports, adding that contrary to speculation, there would be no reduction in taxes on vehicles this year.

“Given the current economic growth trajectory, we are maintaining a ‘wait and see’ approach on vehicle imports. However, those expecting tax reductions should take note of our agreement with the International Monetary Fund (IMF), which explicitly prohibits any tax cuts this year,” he stated.